Lecture Management (2nd edition) – Chapter 5: Diversity in a global economy

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MANAGEMENT SECOND EDITION Chapter 5 Diversity in a Global Environment Learning Objectives  Understand how managers organize international businesses  Explain the challenges and opportunities of working with cultural differences  Understand the legal requirements for respecting workforce diversity  Recognize and explain the implications of changing workforce demographics  Interpret the dimensions of diversity as a management strategy to increase innovation, creativity, and performance Copyright ©2017 John Wiley & Sons, Inc. Managing in a Global Economy (p. 118)  To achieve results in today’s global economy, managers must understand international business practices, including international trade rules, agreements, and legal requirements  Managers must understand culture Copyright ©2017 John Wiley & Sons, Inc. Managing in a Global Economy (cont.)  Global organizations (p. 119) • Global company – organization with operations in multiple countries and its senior management decision making centrally located in one country • Multi-domestic company – organization with operations in multiple countries and its senior management decision making distributed across the countries in which it operates  Importing – process of acquiring products and services from another country  Exporting – process of creating products in one country and selling them in another Copyright ©2017 John Wiley & Sons, Inc. Managing in a Global Economy (cont.)  Strategic partnerships (p. 119) • Agreement between two or more organizations to share complementary resources to develop and sell products and services  Direct foreign investment • Buying existing or building new businesses in other countries  World Trade Organization (WTO) • Organization responsible for global trade rules between countries Copyright ©2017 John Wiley & Sons, Inc. Managing in a Global Economy (cont.)  Regional trade zones (p. 119) • Zones established through trade agreements among several countries in which trade barriers are reduced or eliminated for member countries • North American Free Trade Agreement (NAFTA) - involves Canada, Mexico, and the United States • European Union – political and economic union of 27 European countries that share a common currency • Association of Southeast Asian Nations (ASEAN) – cooperative organization of 10 countries in Southeast Asia established to promote economic, political, and social progress throughout the region Copyright ©2017 John Wiley & Sons, Inc. Applying Critical Thinking (p. 120)  Success to the successful Figure 5.1a Copyright ©2017 John Wiley & Sons, Inc. Applying Critical Thinking (cont.)  Success to the client! Figure 5.1b Copyright ©2017 John Wiley & Sons, Inc. Cultural Differences (p. 121)  Cultural intelligence • Ability to understand and make effective decisions based on cultural differences  Three approaches to deal with cultural differences • Ethnocentric – management believes that people who share their cultural values make the best managers • Polycentric – management believes that managers from a particular country know best how to achieve results in that cultural context • Geocentric – management seeks talent and best practices from all around the world Copyright ©2017 John Wiley & Sons, Inc. Cultural Differences (cont.)  Hofstede’s dimensions of culture (p. 121) • Individualism versus collectivism  Welfare of the individual versus that of the group • Power distance  Distribution of power • Uncertainty avoidance (p. 122)  Tolerance for ambiguity and desire for structure • Competition versus cooperation  Value of personal achievement versus collaboration • Long-term versus short-term orientation  Concern about the future versus concern about the present and past Copyright ©2017 John Wiley & Sons, Inc. Cultural Differences (cont.)  Hofstede’s dimensions of culture (cont.) Figure 5.2 Copyright ©2017 John Wiley & Sons, Inc. Cultural Differences (cont.)  Global Leadership and Organizational Effectiveness (GLOBE; p. 122) • Network of over 150 researchers from 62 cultures assembled to study cultural dynamics in leadership and management • Nine cultural dimensions • Found agreement about universal positive attributes of leadership Copyright ©2017 John Wiley & Sons, Inc. Cultural Differences (cont.) Figure 5.3 Copyright ©2017 John Wiley & Sons, Inc. Legal Basis for Managing Diversity (p. 125)  Diversity • Degree to which an organization represents different cultures • Deep-level diversity – differences represented in a group cannot be seen • Surface-level diversity – differences among group members based on visual cues Copyright ©2017 John Wiley & Sons, Inc. Legal Basis for Managing Diversity (cont.)  Dimensions of diversity Figure 5.4 Copyright ©2017 John Wiley & Sons, Inc. Legal Basis for Managing Diversity (cont.)  Affirmative action (p. 125) • Proactive steps taken to counteract discrimination  Disabilities • Physical or mental impairments that substantially limit one or more of an individual’s major life activities  Discrimination • Treating individuals or groups unfairly based on diversity traits  Glass ceiling • Invisible barrier that limits the opportunities of women and minorities for advancement to upper-level positions Copyright ©2017 John Wiley & Sons, Inc. Legal Basis for Managing Diversity (cont.)  Wage gap between men and women Figure 5.5 Copyright ©2017 John Wiley & Sons, Inc. Legal Basis for Managing Diversity (cont.)  Women in U.S. business Figure 5.6 Copyright ©2017 John Wiley & Sons, Inc. Talent in a Diverse Workforce (p. 129)  Changing workforce age demographics Figure 5.7 Copyright ©2017 John Wiley & Sons, Inc. Talent in a Diverse Workforce (cont.)  Workforce trends Figure 5.8 Copyright ©2017 John Wiley & Sons, Inc. Talent in a Diverse Workforce (cont.)  Workforce trends Figure 5.8 Copyright ©2017 John Wiley & Sons, Inc. Talent in a Diverse Workforce (cont.)  Workforce trends Figure 5.8 Copyright ©2017 John Wiley & Sons, Inc. Talent in a Diverse Workforce (cont.)  Outsourcing (p. 131) • Hiring an outside company to fulfill one or more of an organization’s core functions  Off shoring • Moving a business process to another country  Professional employee organizations (p. 132) • Offer employee management services to other companies Copyright ©2017 John Wiley & Sons, Inc. Managing Diversity as an Advantage (p. 133) Figure 5.9 Copyright ©2017 John Wiley & Sons, Inc. Managing Diversity as an Advantage (cont.)  Diversity as a strategy (p. 133) • Investing in diversity positively affects creativity and innovation which increases performance • Social integration – degree to which individuals in a group share and collaborate based on their unique perspective Figure 5.10 Copyright ©2017 John Wiley & Sons, Inc. Managing Diversity as an Advantage (cont.)  How diversity affects creativity and innovation • Diversity dimensions affect group and team processes, ultimately increasing organizational creativity and innovation Figure 5.11 Copyright ©2017 John Wiley & Sons, Inc. Applying Critical Thinking (p. 135)  Fixes that fail - A doomed cultural fix Figure 5.12 Copyright ©2017 John Wiley & Sons, Inc. Managing Diversity as an Advantage (cont.)  Fostering diversity (p. 134) • Build a company culture that embraces diversity as a core tenet (p. 136) • Design a business strategy to attract and retain talent to support the organization’s culture and to meet client expectations • Establish policies and expectations of practices to support the business strategy • Structure individual and group skills and competencies necessary to support the organization’s culture, strategy, policies, and practices Copyright ©2017 John Wiley & Sons, Inc. Managing Diversity as an Advantage (cont.)  IBM’s diversity as a strategic advantage Figure 5.13 Copyright ©2017 John Wiley & Sons, Inc.
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